Each time the CPI comes out, commentators and investors spend a lot of time dissecting the data and finding ways to give it credit or tear it apart. Many people say inflation reported by the government is not indicative of their personal experience and I agree. My budget and expenditures are up far more than 2.3% over the past year, so I did some research.

The most valuable part of my investigation came from talking to some people at the Bureau of Labor Statistics. First off, I have to say that I was impressed with their responsiveness, willingness to answer my questions and the intelligence of their response. I wanted to find out whether they had any studies or data which shows the CPI by demographic group. They have some some subsets broken down by elderly(CPI-E) and blue collar (CPI-W), but not much more than that.

The CPI commonly quoted is a composite number and is not likely to match the individual experience of each consumer. One great point from a BLS employee was that the CPI includes an average of housing costs and that average includes rental data as well as home ownership. Yet none of us have a primary residence that we simultaneously rent and own. So when you see the CPI each month, try to remember that the average is an average and read this explanation as to why the CPI may not match up to your experience.

Some people say that perception is reality so you can evaluate this great article on the demographic impacts affecting how an individual thinks about inflation. Here’s what I think. Your personal demographics are extremely important to actual inflation and when that is compared to your income / wealth, it becomes pronounced. If you are getting a college degree, you likely feel the huge increase in tuitions. If you are older and on a fixed income, then your experience with rapidly increasing medical costs are probably skewing your inflation experience. Note that I am unable to imagine or describe anyone who is experiencing tame inflation.

We all have different lives with a matrix of demographics that affect our spending patterns and the ability to pay for them. Inflation is a personal experience. Only a few people exist in the happy medium of 2.3% shown by the most recent CPI. The rest of us who eat, drive, live in heated homes, go to the doctor, etc. are probably experiencing a different inflation number.